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SC partially upholds Kerala HC verdict regarding salary limit of 15,000

SC partially upholds Kerala HC verdict regarding salary limit of 15,000

According to Livelaw, The supreme court (SC) has partially upheld the Kerala High Court judgment. The court has quashed the limit of Rs 15,000 monthly salary for joining the pension fund.

Case Background

An appeal was filed in the supreme court (SC) by the Employees Provident Fund Organization (EPFO) and the Union Government. The appeal was challenged against:-

The Kerala, Rajasthan, and Delhi High Court judgments which had quashed the Employee’s Pension (Amendment) Scheme, in 2014.

Court Proceedings

A bench comprising Chief Justice of India UU Lalit, Justice Aniruddha Bose, and Justice Sudhansha Dhulia pronounced the verdict while hearing the appeals.

“Employees who could not exercise the option due to the cut-off date shall be given a further chance to exercise the option. They shall be given a further chance of 4 months. Employees who retired before September 1, 2014, without exercising the option will not be entitled to the benefit of the judgment,” said the bench.

Court Judgement

The Court has given judgment on the following points:

The court has held as invalid the condition in the 2014 scheme that the employees are required to make a further contribution at the rate of 1.16% on the salary exceeding Rs.15,000/-.

The court has pronounced that the pension amount for the employees will be calculated based on the average the salary in last 60 months.

Court Argument Ground

The EPFO raised the main argument that the Pension Fund and the Provident Fund it was argued that Pension Scheme is intended for low-age employees and if the persons drawing salaries above the cut-off limit are allowed to draw pensions as well, it will create a huge imbalance within the fund.

Employee Benefited

This will be giving relief to the employees. The employees who retired before September 1, 2014, and who exercised the option shall be covered by 11(3) of the Pension scheme as it stood before the 2014 Amendment.

The 2014 amendments were brought to address the issue of cross-subsidization between pension and provident funds.


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